Greece is the crisis that won’t go away. The hapless nation’s economic and fiscal woes are really just a microcosm of what is facing the entire European Union. Debt levels are unsustainable, spending continues to be out of control and politicians attempt to place band aids on the problems, which will only make them worse in the long run.

Somewhere at the end of all this, Europe is going to be hit hard with an unprecedented economic and fiscal crisis.

Will it be touched off by a Greek default? Some observers think so. S&P has now downgraded the country’s credit rating to “selective default,” from the already lowly CCC rating.

A Greek default will not be kind to the financial markets. This is yet another crisis from which investors must protect their wealth with gold investments.

MYM blog readers may recall that Italy is in bad economic and fiscal shape. Italy’s problems are overshadowed by those of Greece and Spain, but, like much of Europe, Italy is in trouble as well.

One sign of that is the announcement this week that Standard & Poor’s has downgraded Monte dei Paschi di Siena, Italy’s–and the entire world’s–oldest bank, to junk status (BB+).

The bank has been around since 1472–20 years before Columbus voyaged to the New World.

A track record going back nearly 600 years is not enough for investors to depend on in today’s uncertain world. Investors would do better to depend upon an asset that has a track record of security and stability that is 10 times as long as that: GOLD.

The US economy is NOT getting better. This has serious implications for the US dollar and the financial markets. NOW is the time to stock up on hard assets as a form of financial insurance. Coin Trader can advise you on the best hard asset investments for your personal goals and needs.

U.S. Unadjusted Unemployment Shoots Back Up

U.S. unemployment, as measured by Gallup without seasonal adjustment, was 7.8% for the month of November, up significantly from 7.0% for October. Gallup’s seasonally adjusted unemployment rate is 8.3%, nearly a one-point increase over October’s rate.

Bank of America/Merrill Lynch economist Ethan Harris is warning that the game politicians in Washington are playing ahead of the “fiscal cliff,” is dangerous and could amount to an “economic heart attack.”

Letting the country careen over the fiscal cliff as part of a bargaining strategy to push through fiscal reforms would serve as a dangerous game politicians would be playing with the economy, said Bank of America Merrill Lynch economist Ethan Harris.

At the end of this year, tax hikes are scheduled to kick in at the same time government spending cuts take effect, a combination known as a fiscal cliff that could tip the economy into a recession next year if left unchecked by Congress and the White House.

Some lawmakers have suggested Jan. 1 can come and go without a deal and address the issue by putting one another’s feet to the fire or punting on deadlines as tax hikes and spending cuts take root.

Even talk of such strategy can damage the economy.

“One of the most dangerous ideas circulating in Washington is that it is okay to go over the cliff temporarily,” Harris said a note to clients, according to CNBC.

“Threatening or actually going over the cliff will likely do serious damage to economic and market confidence. What some people are calling a ‘bungee jump’ could cause an economic heart attack.”

It’s disheartening for investors to hear that the two political parties are so far apart with this unprecedented set of circumstances set to converge in just one month’s time.

This is certainly no laughing matter for investors. Not only might large amounts of our wealth be taken away by higher tax rates and closures of so-called tax “loopholes,” but we are also threatened by fiscal policies that could continue the devaluation of the US dollar and even accelerate what many see as inevitable high inflation. What may be even worse is that the impact could send the US economy into another recession in the process.

That combination of recession and high inflation is called “stagflation,” a phenomenon that we have written about from time to time. The last time the US was inflicted with serious stagflation in the mid-1970s, the stock market fell 45% in 21 months, the price of gold tripled and a broad index of rare coins appreciated by some 1,000%